The Australian housing market could drop – Why this is good for investors

FILE - In this Thursday, Feb. 18, 2021, file photo, a new home is for sale in Madison, Ga. Mortgage buyer Freddie Mac reported Thursday, July 14, 2022, that the 30-year rate rose to 5.51% from 5.30% last week, just as the latest government data shows inflation has not slowed, meaning the Federal Reserve is almost certain to raise its benchmark borrowing rate again. (AP Photo/John Bazemore, File)

Is the Australian property BULL-RUN coming to an end? Is this an opportunity?

let’s find out!

 

It should come as no surprise, that the RBA has been increasing its cash rate over the last few months as Australia has seen one of the strongest bull runs on property in years!

But is it all coming to an end?

We have seen an increase of 1.25% in the official cash rate since June 2022 as the Australian government tries to get inflation under control. According to CoreLogic’s Hedonic index, property values across the five largest cities in Australia fell by more than 0.8% in June, following on from a loss of 0.4% in May.

Some of the steepest losses came from Sydney and Melbourne where property prices fell by more than 1%. Since their peaks earlier in the year, Sydney has lost a whopping 3.1% and Melbourne has taken a blow of 1.9%.

So what does all this mean for property investors?

As the RBA increases its cash rate, it will make borrowing money from lenders and banks a little trickier and more expensive for the average buyer. This should slow the market down from a rolling boil to more of a gentle simmer. This will present opportunities for the cashed-up investors to come in and snap up bargains as sellers and real estate agents get desperate with properties staying on market longer with less interest.

So What should you do?

One option to consider would be to refinance your current property portfolio, tap into unused equity and park it in an offset account ready to pounce when the right opportunity presents itself.

Some added benefits include the potential to decrease your overall interest rate (if you haven’t refinanced in a while) and the opportunity to pick up a cashback promotion that you may be eligible for.

With access to 60+ lenders, the team at Ur Wealth Advisory can help accomplish this if you have an Australian property portfolio. Let’s talk!

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